BILL ANALYSIS
AB 1600
Page 1
CORRECTED - 06/02/2010 Technical change (Member name)
ASSEMBLY THIRD READING
AB 1600 (Beall)
As Introduced January 4, 2010
Majority vote
HEALTH 13-6 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Carter, |Ayes:|Fuentes, Ammiano, |
| |Bradford, De Leon, Eng, | |Bradford, |
| |Hayashi, Hernandez, | |Charles Calderon, Coto, |
| |Jones, Bonnie Lowenthal, | |Davis, |
| |Nava, V. Manuel Perez, | |Monning, Ruskin, Skinner, |
| |Salas | |Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Fletcher, Conway, |Nays:|Conway, Harkey, Miller, |
| |Emmerson, Gaines, Smyth, | |Nielsen, Norby |
| |Audra Strickland | | |
| | | | |
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SUMMARY : Requires health plans and health insurers to cover the
diagnosis and medically necessary treatment of a mental illness,
as defined, of a person of any age, including a child, and not
limited to coverage for severe mental illness (SMI) as in existing
law. Specifically, this bill :
1)Requires health plans and those health insurance policies that
provide coverage for hospital, medical, or surgical expenses, to
provide coverage for the diagnosis and medically necessary
treatment of a mental illness of a person of any age, including
a child, under the same terms and conditions applied to other
medical conditions, including but not limited to maximum
lifetime benefits, copayments, and individual and family
deductibles. Existing law only requires such coverage for SMIs,
as defined.
2)Defines "mental illness" as a mental disorder classified in the
Diagnostic and Statistical Manual IV (DSM-IV) and includes
coverage for substance abuse. Requires the benefits provided
under this bill to include outpatient services; inpatient
hospital services; partial hospital services; and, prescription
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drugs, if the plan contract already includes coverage for
prescription drugs.
3)Requires, following publication of each subsequent volume of the
DSM-IV, the definition of mental illness to be subject to
revision to conform to, in whole or in part, the list of mental
disorders defined in the then-current volume of the DSM-IV.
4)Requires any revision to the definition of mental illness
pursuant to 3) above to be established by regulation promulgated
jointly by the Department of Managed Health Care and the
Department of Insurance.
5)Allows a health plan or health insurer to provide coverage for
all or part of the mental health coverage required by this bill
through a specialized health care service plan or mental health
plan and prohibits the health plan or health insurer from being
required to obtain an additional or specialized license for this
purpose.
6)Requires a health plan or health insurer to provide the mental
health coverage required by this bill in its entire service area
and in emergency situations, as specified.
7)Permits a health plan and health insurer to utilize case
management, network providers, utilization review techniques,
prior authorization, copayments, or other share-of-cost
requirements, to the extent allowed by law or regulation, in the
provision of benefits required by this bill.
8)Exempts contracts between the Department of Health Care Services
and a health plan for enrolled Medi-Cal beneficiaries from the
provisions of this bill.
9)Exempts accident-only, specified disease, hospital indemnity,
Medicare supplement, dental-only, or vision-only insurance
policies from the provisions of this bill.
10)Prohibits a health care benefit plan, contract, or health
insurance policy with the Board of Administration of the Public
Employees' Retirement System from applying to this bill unless
the board elects to purchase a plan, contract, or policy that
provides mental health benefits mandated under this bill.
FISCAL EFFECT : According to the Assembly Appropriations
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Committee, no direct public fiscal impact is associated with this
measure. Although a cost to the Healthy Families
Program (HFP) was previously identified by the California Health
Benefits Review Program (CHBRP), HFP will be implementing mental
health parity (MHP) in October of 2010, prior to
when this bill's requirements would become effective. Annual
increased premium costs in the private insurance market of $54
million. These costs will be reduced as federal health reform
requirements take effect.
COMMENTS : According to the author, current federal law prohibits
health plans from setting annual or lifetime dollar limits on an
enrollee's mental health benefits that are lower than any such
limits on medical care. According to the author, an alarming
number of mentally ill persons end up incarcerated because they
lack access to appropriate care. The author maintains that
inadequate access to mental health services forces law enforcement
officers to serve as the mental health providers of last resort,
and this misuse of the corrections system costs state taxpayers
roughly $1.8 billion per year. The author asserts that the shift
by the private insurance market over the last 20 years to exclude
entitled covered enrollees by cherry picking out "mental illness"
has been borne financially by the state and counties to the
benefit of private insurers. This bill is intended to end the
discrimination against patients with biological brain disorders,
such as schizophrenia, depression, and manic depression, as well
as posttraumatic disorders suffered by victims of crime, abuse or
disaster, by requiring treatment and coverage of these illnesses
that is equitable to coverage provided for other medical
illnesses.
Current law requires health plans and health insurers to provide
coverage for the diagnosis and medically necessary treatment of
certain SMIs of a person of any age, and of SEDs of a child, as
defined, under the same terms and conditions applied to other
medical conditions. MHP must provide at least, in addition to all
basic and other health care services required by current law,
coverage for crisis intervention and stabilization, psychiatric
inpatient services, including voluntary inpatient services, and
services from licensed mental health providers. Since SMI
services are already covered under current law, this bill focuses
on the incremental effect of extending parity to non-SMI and
substance abuse disorders.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPA),
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enacted in October 2008, requires group health insurance plans to
cover mental illness and substance abuse disorders on the same
terms and conditions as other illnesses and help to end
discrimination against those who seek treatment for mental
illness. Under the MHPA, if a health plan does offer mental
health coverage, then it is required to provide equity in
financial requirements, such as deductibles, co-payments,
coinsurance, and out-of-pocket expenses; equity in treatment
limits, such as caps on the frequency or number of visits, or
limits on days of coverage; and, equality in out-of-network
coverage. Although this bill defines mental illness as those
disorders identified in the DSM-IV, the MHPA does not specify a
definition for mental health and substance abuse (MH/SA)
disorders.
In its analysis of this bill, CHBRP reports that when parity is
implemented in combination with a range of techniques for
management of MH/SA services, and is provided to individuals who
already have some level of coverage for these services, consumers'
average out-of-pocket costs for MH/SA services decrease; there is
a small decrease in health plans' expenditures per user of MH/SA
services; rates of growth in the use and cost of MH/SA services
decrease; utilization of MH/SA services increases slightly among
individuals with SA disorders, individuals with moderate levels of
symptoms of mood and anxiety disorders, and persons employed by
moderately small firms who have poor mental health or low incomes;
and, the effect on outpatient MH/SA visits depends on whether
individuals were enrolled in a fee-for-service plan or a health
maintenance organization or HMO prior to the implementation of
parity. CHBRP estimates that, among individuals in policies
affected by this bill, utilization would increase by 10.5
outpatient mental health visits and 3.1 outpatient substance abuse
visits per 1,000 members per year. CHBRP also found that no
measurable change in the number of uninsured is projected to occur
as a result of this bill because, on average, premium increases
are estimated to increase by less than 1%. The scope of potential
outcomes related to MH/SA treatment includes reduced suicides,
reduced symptomatic distress, improved quality of life, reduced
pregnancy-related complications, reduced injuries, improved
medical outcomes, and improved social outcomes, such as a decrease
in criminal activity.
Supporters, including the California Psychiatric Association,
National Alliance on Mental Illness, Crestwood Behavioral Health,
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Inc., and California Academy of Family Physicians, write that
this bill would require coverage of the full range of mental
disorders and provide for their treatment when medically necessary
on the same terms and conditions as other health conditions.
Supporters note that mental disorders, when untreated, cause
significant suffering, disability, and lost productivity and,
unlike most other health conditions, may also result in arrest,
incarceration, and homelessness in addition to costly
hospitalizations and all too often death. They contend that the
costs of increasing coverage to provide full parity for mental
disorders are negligible and likely outweighed significantly by
the costs of non-treatment.
Health plans and health insurers object to this bill, arguing that
it greatly expands the types of mental health services that health
plans and insurers would be required to cover and employers would
have no choice but to purchase. Opponents contend that, in this
era of escalating medical costs and significant premium increases,
mandating additional new benefits into all health insurance
policies, while well-intended, is counterproductive to their
efforts to make health insurance more affordable and available to
all Californians. The California Association of Joint Powers
Authorities adds in opposition that this bill imposes an
unreimbursed mandate on local public entities for costs associated
with the expansion and utilization of coverage benefits.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916) 319-2097
FN: 0004641